FY2012 Annual Report on Energy (Energy White Paper 2013) Outline

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FY2012 Annual Report on Energy (Energy White Paper 2013) Outline

Transcript Of FY2012 Annual Report on Energy (Energy White Paper 2013) Outline

Provisional Translation
FY2012 Annual Report on Energy (Energy White Paper 2013) Outline
June 2013 Agency for Natural Resources and Energy
This is a provisional English translation. Please refer to the original Japanese for official use.
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FY2012 Annual Report on Energy (Energy White Paper 2013) Outline
June 2013 Agency for Natural Resources and Energy
○ The Energy White Paper shall be reported to the Diet every year based on the Basic Act on Energy Policy
○ Part 1 of this White Paper, which is the tenth report to the Diet, consists of the following two chapters.
・ Part 1, Chapter 1: Consideration of Global Experiences Surrounding Energy → In this chapter, the report takes into consideration global experiences surrounding energy usage so that the Government of Japan is able to gain standpoints for establishing responsible energy policies in the future.
・ Part 1, Chapter 2: The Great East Japan Earthquake and Zero-based Review of Japan's Energy Policies → In this chapter, the report describes the situations that Japan underwent from August 2012 to around the end of March 2013, concerning the key measures the Government took following the Great East Japan Earthquake and its zero-based review of its energy policies. (the details of the situation up to the end of July 2012 were provided in the 2012 White Paper).
*Part 2 explains energy trends in Japan and overseas, and Part 3 outlines the measures taken during the previous fiscal year.

Chapter 1: Consideration of Global Experiences Surrounding Energy 1-1 Human History and Energy
1. Human beings have improved and diversified their energy usage in accordance with the development of their lifestyles. Energy consumption has continued to increase due to the expansion of energy use and dissemination of convenient energy sources, such as coal, oil, and natural gas.
2. The utilization of energy in various fields has raised standards of living and improved public health, which has led to an increase in population and a resulting further expansion of energy consumption. This tendency is expected to continue into the future.
3. Energy is used in all aspects of today’s society, including clothing, food and housing, as well as labor, travel, and entertainment. Today’s society cannot be maintained without a stable and economical supply of energy.

Human History and Energy

Diversified Energy Usage in Today’s Society

2

1-2 Potential Risks behind the Complex Energy Supply Chain and Responses to be Taken
1. Energy is indispensable to the functions of modern society, but requires a long, complex supply chain consisting of cross-border production (procurement), distribution, and consumption before it can be utilized by end users at their companies and homes. Technological development is also a necessary cross-sectional factor.
2. A problem with any of the processes that make up the complex global energy supply chain can interrupt the stable and economical distribution of energy to end users.
3. The history of energy development and use, which progressed in concert with human development, contains examples of various problems that have emerged in the energy supply chain and responses taken to such problems. In order to establish a responsible energy policy, it is necessary to learn the lessons provided by these past examples.
4. In collecting examples from the past, we need to take into account the fact that Japan is surrounded by the ocean and lacks natural resources, despite being a technology-oriented nation with many advanced energy technologies.

Resource exploration

Export permit
Production (procurement)

Power transmission Storage and Domestic

and distribution refining

distribution

Oil

Coal

Natural gas

Tanker shipping

・ Disasters ・ Accidents ・ Policy changes in supplier countries and increases in demand ・ Trouble on the shipping routes

Pipeline transport

Distribution
・ Disasters ・ Defects in infrastructure facilities

Transportation Commerce

Industry Households

Consumption
・ Price increases ・ Effect on the environment

Technological

・ Assignment of the burden of development costs

development

・ Technical restrictions

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1-2-1 Case Studies of Issues Surrounding Energy Supply Chain Processes (i) [Production (Procurement) Process (i)]

Production (Procurement) Process (i)

Blockage of the Suez Canal (1956 and 1967) – Blockage of a choke point –
A choke point of the route from the Middle East to Europe was blocked for ten months due to the Second Middle Eastern War. European countries attempted to reduce their oil consumption as an emergency measure. The canal was blocked again in 1967.

Ships sunk at the time of the blockage of the Suez Canal

Responses

European countries and other countries attempted to achieve independence from their conventional oil supply systems, which had become fully dependent on certain geographical areas (diversification and decentralization of supply sources). The OEEC (the predecessor of the OECD) recommended the special stockpiling of oil, and oil reserves were increased.

Nuclear Power Plant Accidents (1979, 1986, and 2011) – Serious effects in the surrounding regions –

The accidents at the Three Mile Island NPP (1979), the Chernobyl NPP (1986), and Tokyo Electric Power Company’s Fukushima Daiichi NPS (2011) seriously affected their surrounding areas.

The IAEA International Nuclear and Radiological Event Scale and Past Major Nuclear Accidents

7: Major Accident

●Accident at the Chernobyl NPP, former Soviet Union (1986) ●Accident at TEPCO’s Fukushima Daiichi NPS (2011)

6: Serious Accident

●Accident at Kyshtym, the former Soviet Union (1957)

5:

●Accident at the Windscale NPP, the United Kingdom (1957)

Incident with Wider Consequences ○Accident at the Three Mile Island NPP, the United States (1979)

4:

●Criticality accident at JCO (1999)

Responses

Incident with Local Consequences ○Accident at the Saint Laurent NPP, France (1980)

- Accident levels are evaluated under three criteria: ●Criterion 1 (People and the environment); ○Criterion 2 (Radiological barriers and controls at facilities), and ◎Criterion 3 (Defence in depth). The highest scores are considered to be the evaluation results.

After the Three Mile Island Accident, the United States strengthened safety regulations, and after the accident at the Chernobyl NPP, countries including Germany, Belgium, and Sweden changed their policies on nuclear power and began seeking more diversified energy sources. * The responses to the accident at TEPCO’s Fukushima Daiichi NPS are detailed in Chapter 2.

The First Oil Shock (1973) – Export controls by oil supplier countries –

Changes in GDP growth rates (real GDP)

The world had become increasingly

GDP Growth Rates of Major Countries
%

dependent on oil, and oil producing

10

countries in the Persian Gulf decided to 8

First oil shock (1973)

raise crude oil prices and halt or reduce

Second oil shock (1979)

their crude oil exports, which exerted an 6

Japan

enormous influence on the world economy

4
and pushed the Japanese economy into

US

recession. 2 WGeersmtany

Responses

0 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983
-2

UK France

-4
Oil consuming countries took the initiative and responded in various ways, including geographic diversification of their energy sources and suppliers, proactive implementation of energy conservation measures, development of alternative energy, and promotion of international collaboration (establishment of the IEA).

Intensified Competition for Acquiring and Seizing Resource Interests (the 1970s and 2000s) – Planned procurement of energy becomes increasingly difficult –

As resource-rich countries were trying to seize their resource interests, China, India and other emerging countries have begun to compete with each other on an increasingly intense basis to acquire resource rights and interests.
Responses

Examples of Emerging Countries’ Acquisition of Interests in Oil and Natural Gas (2012)

China India Thailand

CNOOC acquired a Canadian company, Nexen, for US $15 billion.
PTT acquired an interest in a gas field in Mozambique for US $1.9 billion.
ONGC acquired an interest in the Kashagan oil field, Kazakhstan, for US $5.0 billion.

Resource consuming countries have been striving to diversify and decentralize their energy sources, strengthen their diplomatic relationships with resource-rich countries (resource diplomacy), and increase the involvement of their national governments in
4 the overseas expansion of state-owned oil companies, etc.

1-2-2 Case Studies of Issues Surrounding Energy Supply Chain Processes (ii) [Production (Procurement) Process (ii) / Distribution Process]

Production (Procurement) Process (ii)

Natural Disasters (2005, etc.) – Damage to production facilities due to hurricanes, etc. –

A large scale hurricane caused significant damage to U.S. refineries and production facilities in the Gulf of Mexico. Eight refineries suspended production, which accounted for 90% of the total oil production in the United States, and oil prices surged. The IEA decided to release oil reserves as an emergency measure.

Damaged oil refining facilities

Responses

Distribution Process
Northeast Blackout of 2013 – A large-scale blackout caused by inadequate management and operation of the power grid system –
After a blackout occurred due to theEffects of the Blackout (Changes in Night Views Visible by inadequate management of a powerSatellite Observation) transmission company, a lack of communication between related business operators further expanded the blackout (61.8 million kW, affecting 50 million people). In some areas, more than one week was required for complete recovery.
Responses

It became clear that a locally tight supply-demand balance in one area affects the entire world via the international oil market. It became apparent that oil consuming and producing countries need to cooperate to stabilize the market.
Accidents at Energy Production Facilities (2010, etc.) – Large-scale accidents at production facilities and risks of outside attack –
An oil drilling facility on fire
Large-scale accidents at production facilities (such as the oil spill in the Gulf of Mexico) have caused significant environmental pollution, etc. Such facilities are also vulnerable to attacks from outside.
Responses

The investigation committee established jointly by the U.S. and Canadian governments made recommendations on 46 items in its final report including the reliability standards of the North American Electric Reliability Corporation and means of ensuring the independence of the Council.

The Great East Japan Earthquake (2011) – Issues concerning the Energy Supply Infrastructure –

The Great East Japan

Earthquake revealed problems

in Japan’s energy supply

infrastructure, such as the fact

that damage to oil refineries

hindered

the

stable

transportation of gasoline, etc.

Responses

Comprehensive Plan to Ensure the Supply of Gasoline, Light Oil, etc. in the Tohoku Region (Disaster-stricken Areas) and the Kanto Region

The United States temporarily suspended offshore oil drilling projects, and changed its policy to further prioritize a balance between safe operation and management efficiency.

The government of Japan revised the Oil Stockpiling Act and strengthened a system to ensure oil supply even in an emergency.
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1-2-3 Case Studies of Issues Surrounding Energy Supply Chain Processes (iii) [Consumption Process / Technological Development]

US doドllルar/s /バbレar ルrel Yen/ US円dollars
Investment amount

Consumption Process

Rapid Energy Price Increases (the 2000s) – Economic efficiency problems in energy use –
Changes in Crude Oil Prices

Crude oil prices were stable at

160.0

approximately US $20 per barrel

140.0

throughout the 1990s, but have

120.0

been rising since 2004, reaching 100.0 their highest-ever level of

around US$ 147 per barrel in

80.0

2008. The price has since

60.0

remained high.

40.0

140.0

Crude oil

prices

130.0

Exchange

rates

120.0

110.0

100.0

90.0

80.0

Responses

20.0

70.0

0.0

60.0

2020000年0

2001年

2200002年2

2003年

2004年 2004

2005年

2200060年6

2007年

2200008年8

2009年

2010年 2010

2011年

2012年 2012

The development and introduction of non-fossil fuel energy and unconventional fossil fuel energy has been promoted. Efforts to increase self-sufficiency ratios and acquire resource interests have also been active.

Effects on the Global Environment – Environmental pollution and global warming due to the use of fossil fuels –
Air pollution has been caused by sulfur oxides, etc. generated due to the use of fossil fuels for power generation and transportation. In Europe, cross-border environmental pollution caused by air pollutants emitted in other countries has been a social problem since the 1960s, and since the 1990s, global warming caused by greenhouse gas emissions has also been recognized as a serious problem.
Responses

Technological Development

Renewable Energy

– Photovoltaic power generation (approximately 40 years since the

advent of the Sunshine Program) –

Changes in the World’s Investments in

Renewable Energy

The principles underlying solar cells were

(billion US dollars)

300

海洋

discovered in 1839, and the first solar cell

was invented 110 years later in 1954. 250

Solar cells were first used mainly for

satellites. However, triggered by the Oil 200

Shocks, the Government of Japan 投

launched

the

Sunshine

Program

in

1974,

資 150 額

allocating approximately 500 billion yen 100 from the national budget. Thanks to

Geothermal power Small-scale hydropower Biomass

257.5 219.8

Biofuel

166.6

160.9

Photovoltaic

132.8

power

Wind power

96.5

60.8

steady and continuous technological 50 39.5

development, photovoltaic power

generation is widely commercialized at present.

0

2004

2005

2006

2007

2008

2009

2010

2011

Unconventional Oil / Natural Gas Resource Development

– Shale gas (around 70 years) –

Projections of Natural Gas Production in the U.S.

Shale gas production was not commercially-viable in the 1990s, but due to advancements in various drilling technologies (e.g., the hydraulic fracturing technology first introduced in the 1940s), the production of shale gas expanded rapidly starting in the mid2000s. At present, shale gas accounts for 25% of total natural gas production in the United States.

As countermeasures, technological development to curb emissions of air pollutants has been promoted and stricter regulations on fuel quality have been established. International deliberations have been underway regarding the issue of global warming.

* Technological development is a cross-sectional factor necessary for the production (procurement), distribution, and consumption processes. Energy-related technological development cannot be achieved in a short time, and often requires ongoing R&D
investment for several decades before commercialization. 6

1-3 Perspectives on the Establishment of Japan’s Future Energy Policy
1. Issues observed in the examples from the past can be roughly categorized as (i) accidents and natural disasters affecting production facilities, (ii) reduction of exports due to policy changes in supplier countries, (iii) blockage of transportation routes, (iv) defects in distribution systems, or (v) rapid energy price increases and global environmental effects. If any one of these occurs, the stable and economical supply of energy may be interrupted.
2. National governments have taken various measures to address these problems, but their goals can be categorized as I. diversification of energy sources, II. decentralization of supply sources, III. building of safety nets, IV. ensuring safety and stability, and V. ongoing technological development on a long-term basis.
3. Given these examples, it will be indispensable for the Government of Japan to carefully formulate measures in relation to all of the above-listed categories I. to V. in the attempt to enact responsible energy policies.

Production (Procurement)

Distribution

Consumption

Technological Development

Issues observed in past examples

(i) Accidents and natural disasters affecting production facilities

(ii) Reduction of exports due to policy changes in supplier countries

(iii) Blockage of transportation routes

(iv) Defects in distribution systems

(v) Rapid energy price increases and global environmental effects

Goals for response measures

I. Diversification of energy sources

II. Decentralization of supply sources

III. Building of a safety net

IV. Ensuring of safety and stability

V. Ongoing technology development on a longterm basis

Establishing a Responsible Energy Policy

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Chapter 2 The Great East Japan Earthquake and Zero-based Review of Japan's Energy Policies

1. Due to the Great East Japan Earthquake and the accident at TEPCO’s Fukushima Daiichi NPS, as well as the rapidly changing global situation in which energy demand has been increasing mainly in emerging countries, Japan now faces new energy constraints. The Government of Japan needs to deal with the aftermath of the Fukushima Daiichi NPS accident and take meticulous measures in relation to the production (procurement), distribution, and consumption processes.
2. An energy policy should place great emphasis on the pursuit of all possible measures to ensure a stable energy supply and avoid hindering people’s daily lives and economic activities in any circumstance. It is necessary to implement zero-based review on Japan’s energy policy and establish a responsible energy policy also from the perspective of ensuring a stable energy supply and reducing energy costs.
3. Chapter 2 explains energy-related measures that have been taken since the release of the 2012 Energy White Paper (during the period between August 2012 and approximately the end of March 2013) and the status of the zero-based review of Japan’s energy policy.

(1) In Relation to the
NPS Accident
(i) Nuclear power regulations
(ii) Efforts towards Decommissioning TEPCO’s Fukushima Daiichi NPS Units 1 to 4
(iii) Compensation for nuclear accidentrelated damage
(iv) Assistance of residents affected by the nuclear accidents

(2) Production
(Procurement) Process
(i) Introduction of renewable energy to the maximum extent
(ii) Introduction of the world’s most efficient thermal power generation facilities (coal and LNG), while giving due consideration to the environment
(iii) Promotion of efforts to acquire resources and resource development in Japan

(3) Distribution Process
(i) Electricity system reform
(ii) Strict assessment of electricity rates
(iii) Development of oil and LP gas supply systems

(4) Consumption Process
(i) Energy conservation measures
(ii) Energy management
(iii) Electricity supplydemand measures

(5) Zero-based Review
of Energy Policy
(i) Energy and Environment Council
(ii) Instructions, etc. given by the Prime Minister at the third meeting of the Headquarters for Japan’s Economic Revitalization
(iii) Energy policy discussions at the Council for Industrial Competitiveness
(iv) Deliberations on the Basic Energy Plan

8

2-1 In Relation to the NPS Accident

(1) Nuclear power regulation
(i) Establishing the Nuclear Regulation Authority The NRA was inaugurated on September 19, 2012. Its mission is to protect people and the environment through solid nuclear energy regulations. The NRA had held 35 Commission Meetings by the end of March 2013.
(ii) Initiatives to ensure the safety of nuclear/radiological facilities Ensuring the safety of TEPCO’s Fukushima Daiichi NPS, reviewing regulatory requirements (a draft of the new regulatory requirements was compiled in February 2013), and implementing investigations of fracture zones at NPS sites since October 2012 Implementing safety inspections at nuclear facilities nationwide (periodic inspections and operational safety inspections).
(iii) Initiatives to develop a crisis management system and mitigate the effects in the event of an accident Development of a system to respond to nuclear disasters, preparation of the Nuclear Emergency Response Guidelines (October 2012), initiatives for emergency responses by the NRA, and radiation monitoring.
(iv) Initiatives to ensure trust in the nuclear regulatory administration Ensuring transparency, neutrality, and independence, preventing self-isolation and selfrighteousness, securing human resources and enhancing expertise, and international activities.
(2) Efforts toward decommissioning of TEPCO’s Fukushima Daiichi NPS Units 1 to 4
(i) According to the Mid-and-Long-Term Roadmap, continuous efforts towards the decommissioning have been implemented. In order to commence fuel removal from the spent fuel pool at Unit 4, one of the current highest priority issues, rubbles in the upper level of the reactor building have been removed and a cover for the fuel removal is under construction. The fuel removal will start in November 2013.
(ii) On February 8, 2013, the Council for the Decommissioning of TEPCO’s Fukushima Daiichi Nuclear Power Station was established under the Nuclear Emergency Response Headquarters. It aims to strengthen the R&D framework and to enhance the further collaboration between on-site work and R&D program. In order to accelerate the decommissioning, the Council initiates to strengthen the R&D organizational structure and to revise the Mid-and-Long-Term Roadmap.
(iii) In April 2013, the Committee on Countermeasures fro Contaminated Water Treatment was established under the Council in order to consider the urgent measures against contaminated water leakage incidents and the mid-and-long-term measures to resolve the contaminated water problem fundamentally. The Ministry of Economy, Trade and Industry (METI) and the NRA have been cooperating with each other, and the government has made a concerted effort to steadily proceed with the decommissioning, including the contaminated water treatment.

(3) Compensation for nuclear accident-related damage
(i) Publication of compensation standards METI publicized the Concept for Compensation Standards following Review of the Areas under Evacuation Orders in July 2012 (TEPCO began accepting compensation claims for housing lands, buildings, etc. in March 2013). The Dispute Reconciliation Committee for Nuclear Damage Compensation added new types of damage due to harmful rumors concerning the agriculture, forestry and fisheries industries and the food industry (the third such addition) and enhanced the functions of the Nuclear Damage Compensation Dispute Resolution Center.
(ii) Approval of partial alteration of the Comprehensive Special Business Plan In February 2013, the Cabinet Office and METI approved a partial alteration of the Comprehensive Special Business Plan which incorporates such matters as the expansion of the compensation support budget of 3.1 trillion yen and TEPCO’s responses to the extinctive prescription of the right to seek damage compensation. TEPCO had paid approximately 2 trillion yen in compensation by the end of March 2013.
(4) Support for Residents affected by Nuclear Accident
(i) Rearrangement of restricted areas and areas to which evacuation orders have been issued The areas to which evacuation orders have been issued are being rearranged in eleven municipalities (as of the end of March 2013, finished rearrangement in nine municipalities).
(ii) Temporary access into the restricted areas, etc. Since May 2011, implemented seven times by end of March 2013 and a total of 233,106 people from 102,814 households entered the areas.
(iii) Decontamination By the end of February 2013, the decontamination implementation plans have been established for special areas in nine municipalities. Full- scale decontamination works have commenced based on these plans from municipalities where preparations are completed.
(iv) Support for health management survey programs The government fully supports Fukushima prefecture in many ways, and offers grants to the Fund for the Fukushima Health Management Survey established by the prefecture.
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